Samoa Airways C.E.O. responds to Audit queries

The Chief Executive Officer of Samoa Airways, Tupuivao Seiuli Tuala, says staff discounts highlighted by the Auditor General's report to Parliament, which formed the basis of a story titled "Auditor queries Samoa Airways staff benefits," are for the Pago route only and has been in place since 2005. 

Tupuivao made the point in a press release issued by Samoa Airways on Wednesday afternoon in response to the story in question.

The statement emphasised that the 50 per cent staff travel benefit only applied to the airline’s Pago route and was not applicable to its international destinations. 

“The 50 per cent staff travel benefit is on our Pago route only and has been in place since 2005. This does not apply to any international destinations that the airline operates to,” stated Tupuivao.

According to the airline’s C.E.O., the staff benefit was removed in 2016.

Staff members now pay for their seats in order to travel to Pago Pago in American Samoa.

“Our staff pay for these seats to Pago and fly when there are seats available on the day of the flight. What needs to be understood is this is standard industry practice, globally,” he said.

“Airlines operate flights with empty seats and it's only practical that an airline gets some revenue off an empty seat, otherwise the seat remains as a cost. It's quite disappointing that the Samoa Observer tends to place headlines that lack a clear understanding on how the airline industry works”.

The Samoa Observer story, which Tupuivao criticised, was based on the findings of the Auditor General and Controller Fuimaono Afele Taimalelagi. It was part of the Auditor’s report for the 2018-2019 Financial Year and raised questions about the national airline’s practice of granting employees’ relatives half-price tickets.

However, in the statement distributed by the airline on Wednesday, Tupuivao said the newspaper sent an email last Saturday afternoon and expected a reply to a story which was published the next day.

He said this “shows lack of professionalism” on the part of the Samoa Observer and “is not the first time this has happened.”

The audit report also mentioned other matters pertaining to the airlines systems and processes, which the C.E.O. said has already been addressed as part of the airline’s housekeeping standards.

In addition, over the past few months, the airline has reviewed all areas of the business to streamline its processes. 

“This includes how we can do things better with less costs,” said Tupuivao.

Tupuivao said Samoa Airways, like many airlines across the globe, has been hit by the COVID-19 global pandemic. 

But the airline has taken measures on staff and salary reduction since March this year.  

“The airline has close to 90 per cent of its staff on leave without pay and those that are working have been placed on 50 per cent salary reduction since March this year.”

With its minimum staff, the C.E.O. said the airline continues to ensure operations in American Samoa and its upcoming Savai’I services are not hindered, as well as  the ground handling operations for customer airlines, Air New Zealand, Fiji Airways and other private chartered flight to and from Samoa. 

He added that with the limited team the airline continues to work tirelessly on getting the airline ready for market when borders open up.

“These are not easy times; for us and everyone else affected by this unfortunate situation, but with our faith and belief in God, we will come out of this a lot stronger,” said Tupuivao.

The relevant section of the report - into the airline’s holding company Polynesian Airlines Limited - is printed verbatim below.

Polynesian Airlines Limited for year ended 30 June 2018

1. Finance Policy needs to be updated to reflect the change in organisational structure and size since the inception of the jet operation. Management has agreed on reviewing to include:

· delegation of authority;

· procurement guidelines;

· proper use of vouchers for expending cash float money;

 petty cash limit & handling;

· having vehicles plates with corporation initials;

· proper handling of asset disposals;

· timely update of Fixed Asset Register;

· proper management of obsolete stock/inventory items;

· Taxation of Directors Fees as per Income Tax laws; and

· Posting and Reconciliation of Debtor Accounts.

2. There were missing or misplaced receipt books for the Apia main office for July, August, October, November and December 2017. Management will work on improving their filing practices.

3. Review of monthly bank reconciliations indicated that the preparation and checking of bank reconciliations for foreign bank accounts were not performed properly. Management has agreed to improve their processes as well as recruiting extra staff.

4. Shortage of staff has led to some routine reconciliation of Ledger balances not being carried out properly. Management has agreed to hire extra staff.

5. As per section 10.2 of the Human Resource Manual, the CEO is able to approve employee entitlement of a travelling concession of 50% of airfare. However, it was also noted that this concession was extended to family members. management is currently reviewing the validity of this policy.

3.14 Polynesian Airlines Investment Limited for the year ended 30 June 2018.

1. It was noted during review of year end reconciliation that some ledger reconciliations were not properly reconciled to supporting documents. For instance; accrued expense, provision accounts and associated expenses such as directors’ fees, audit fees and maintenance. Recommendation is noted.

2. The Land and Building category is measured using the revaluation model and the latest revaluation recorded for Fagalii property in the general ledger was performed in 2008, which was 10 years ago. A proper revaluation will be carried out in the current financial year and will be submitted to the Board first for approval before the revaluation balance can be recorded.

3. There were mis-postings of Journal entries due to errors with the formulas in the excel templates used in work papers. Recommendation is noted.

The following is Samoa Airways press release:

Samoa Airways respond to “misleading” reports

(02nd SEPTEMBER 2020); Samoa Airways would like to respond to an article published on Sunday 30th August relating to “Staff receiving 50% discounts”. 

CEO Tupuivao, Seiuli Alvin W. Tuala said that the article is misleading.

 “The 50% staff travel benefit is on our Pago route only and has been in place since 2005. 

This does not apply to any international destinations that the airline operates to.

 In 2016, this benefit for staff was removed. Tupuivao further stated that “our staff pay for these seats to Pago and fly when there are seats available on the day of the flight.  What needs to be understood is, this is standard industry practice, globally.”

 Airlines operate flights with empty seats and its only practical that an airline gets some revenue off an empty seat, otherwise the seat remains as a cost. Its quite disappointing that the Samoa Observer tends to place headlines that lack a clear understanding on how the airline industry works”. 

The CEO advised that the Samoa Observer sent an email on Saturday afternoon expecting an immediate reply for a story to be published the following day, which shows lack of professionalism. It is not the first time that this has happened.

The audit report also mentioned other matters pertaining to the airlines systems and processes, which has already been addressed as part of the airlines housekeeping standards. 

In addition, over the past few months, the airline has  reviewed all areas of the business to streamline its processes. “This includes how we can do things better with less  cost” said Tupuivao. 

Samoa Airways, like many airlines across globe has been hit with the current pandemic. The airline has taken measures on staff and salary reduction since March this year.  The airline has close to 90% of its staff on leave without pay and those that are working placed on 50% salary reduction since March this year.  

With its minimum staff, the airline continues to ensure operations in American Samoa and its upcoming Savai’I services are not hindered, as well as  the ground handling operations for customer airlines, Air New Zealand, Fiji Airways and other private chartered flight to and from Samoa. With the limited team the airline continues to work tirelessly on getting the airline ready for market when borders open up. 

“These are not easy times; for us and everyone else affected by this unfortunate situation, but with our faith and belief in God, we will come out of this a lot stronger,” said Tupuivao. 


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